A Hong Kong family office: asset governance and long-term family planning

Start with the problems the family needs to solve

A family office can organise asset reporting, investment decisions and professional services. For a family with businesses and financial assets in several places, a complete asset report, clear authority and regular communication may be more useful than adding another holding company.

Where assets are relatively simple and coordination needs are limited, first consider whether existing professional services are sufficient. An independent team adds recurring expenditure and management responsibilities. Its scale should match the work it needs to perform.

Understanding the HK$240 million threshold

Hong Kong’s tax concession regime for family-owned investment holding vehicles requires at least HK$240 million in the relevant assets managed by an eligible single family office, alongside substantial activities and other conditions.[1] This is a threshold within a particular tax regime, not a universal registered-capital requirement for family offices or an immigration investment amount.

The Inland Revenue Department’s guidance specifies minimum thresholds of two qualified full-time employees carrying out the relevant investment activities in Hong Kong and HK$2 million in related annual Hong Kong operating expenditure. Staffing and expenditure must also be commensurate with the activities undertaken.[2]

An assessment therefore needs to establish asset types, ownership, family interests and management relationships. Simply adding rough estimates of all family wealth cannot replace a review of the qualifying assets and structure.

Which profits may qualify for the concession?

The concession applies to profits that meet its conditions. It does not mean that all income of every family member becomes exempt once a family office is established.[2] Personal obligations in other jurisdictions also require assessment against each person’s circumstances.

A clear establishment plan identifies who owns the assets, the entities or legal arrangements through which they are held, who makes investment decisions and where the activities take place. Those facts form the basis for assessing tax treatment.

The policy framework continues to develop. Any proposed reliance on additional asset categories or special exceptions should be checked against enacted legislation and the relevant year of assessment. Budget proposals, amendment bills and rules already in force must be distinguished.

Licensing depends on the activities undertaken

The Securities and Futures Commission assesses family offices by reference to their activities. Whether a business carries on regulated activities, whose assets it manages and whether an exemption applies require examination of the actual operating model. Calling an organisation a family office does not create a blanket exemption.[3]

If the office intends to serve other families later, assess that change before expanding. Staffing, authority and legal structures originally designed for one family may not fit the wider service.

Establishment and personal residence are separate

Setting up a family office does not replace an individual immigration permission. Family members intending to work, operate a business or reside in Hong Kong must qualify under an applicable route. The New Capital Investment Entrant Scheme and a family-owned investment holding vehicle may interact structurally, but retain separate requirements.[4]

Permanent resident status does not arise from the age of a company. Ordinary residence and the relevant eligibility category must be assessed under Immigration Department rules.[5] An HKSAR passport has separate requirements, including Chinese citizenship, the right of abode in Hong Kong and a valid permanent identity card.[6]

A family office can support the organisation of family life, but each person’s duties, residence plans and immigration basis should be recorded separately. Corporate, tax and personal immigration matters must each satisfy their applicable rules while fitting the wider plan.

Budget for continuing operations

A minimum operating expenditure requirement is not an all-inclusive service price. The budget should explain the purpose of each expense, who performs the work and how the family will evaluate the result, as well as satisfy the applicable rules.

A useful first step is a complete account of asset categories, ownership, family roles and objectives for the next three years. Those foundations help determine the team and services required, and whether the family is willing to meet the continuing cost.

Explore Hong Kong residence and family planning · Related policy update: designated accounts under New CIES · Discuss your circumstances

This article provides general planning information, not an opinion confirming tax relief, a licensing exemption or immigration approval. Structures, investment activities and cross-border tax matters should be assessed by appropriately qualified professionals against the actual circumstances.